Not for release or distribution in the US

AMP Capital’s Global Direct Property Fund (GDPF) has purchased a core office building in Boston, Massachusetts for US$17.6 million. This follows the acquisition of a Paris office property during 2011 and is the fund’s first US acquisition since the Global Financial Crisis.

Two Liberty Square is a historic B Grade office building centrally located in the most established and densely built area in the Boston financial district, poised for near term growth and long term stability. The iconic building consists of over 64,000 square feet over 11 storeys and is currently 81 per cent occupied.

AMP Capital Fund Manager Tim Fallet said the property provides exposure to what has traditionally been a tightly held investment market.

“Located in the Boston central business district, greenfield sites are non-existent and new office space is entirely dependent on refurbishment and conversion of established buildings, placing upward pressure on office rents,” Mr Fallet said.

“AMP Capital was able to secure the property at a steep discount to replacement value and 25 per cent below the price at which it last traded at the 2007 peak.”

Mr Fallet said it was an opportune time to secure scarce assets in tightly held markets at an attractive price with good growth potential.

“We expect to announce further acquisitions and divestments in the next few months as we capitalise on this favourable stage in the market cycle,” he said.

“With limited quality stock available in the local market and increasing demand for domestic real estate opportunities by both Australian and offshore buyers crowding the market, many local investors are considering offshore real estate markets to complement their domestic portfolio.

“Clients are telling us that there aren’t too many ways to access the current opportunities we’re seeing in the US and Northern European property markets.

“As one of the few funds offering this kind of international core and core plus direct property exposure, our disciplined approach to buy and sell-side opportunities has seen investors enjoying three successive years of over 14 per cent total returns,” Mr Fallet concluded.

The Global Direct Property Fund provides Australian superannuation funds with access to core and core plus direct property investment opportunities in large, liquid and transparent offshore markets. The Fund invests in a strategic mix of international direct property assets across all the property sectors.

 

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